RBS shares fall in wake of Hester’s exit and job cuts

RBS SHARES fell six per cent this morning following the shock departure of chief executive Stephen Hester and an announcement that the state-backed bank would cut jobs as part of its restructuring plans.

Around 2,000 roles will reportedly be slashed from its investment banking division.

Hester, who leaves the bank at the end of the year, has been steering RBS back towards privatisation since its government bailout in 2008, despite the influence of an increasingly hands-on Treasury.

However, a proposal to break up RBS and keep bad assets in the public sector in order to move towards the government’s stake sale has now been watered down, according to the BBC’s Robert Peston today.

Members of the Parliamentary Commission on Banking Standards have asked the Treasury for an in-depth analysis of the proposal and to report back in a few months.